Education Tax Credit Challenge To Be Heard In N.H. Supreme Court

The New Hampshire Supreme Court will hear arguments today on whether it’s constitutional to give tax credits to businesses that donate to private scholarship funds. The program in question has been hamstrung by a lower court ruling.

Only one organization has awarded scholarship under the law, which began last year, and because of a ruling last spring in the Strafford County Superior court, the Network for Education has not been able to give any scholarships to religious schools. The judge ruled that because donors to the organization were given tax credits, the scholarship dollars amounted to public money.

The case now goes before the Supreme Court.

The NEO will argue that money subtracted from tax receipts is not the same as public funds expended through the state budget.

So far the Network for Education has given out $128,000 dollars for scholarships to 103 students. 13 of those students were from public schools, and received the lion’s share of the scholarship dollars.

The program's critics, which include Governor Maggie Hassan, have equated it to a school voucher scheme. It passed in 2012 over then Governor Lynch’s veto.

The Department of Revenue Administration has released a memo clarifying the rules surrounding a controversial education tax credit scholarship. The memo makes clear that the state’s largest scholarship organization will have to change how it operates next year.

The Network for Educational Opportunity will have to give 70 percent of its scholarships to individual public school students. This year it’s giving 70 percent of the funds to just 13 public school students. That’s the lion’s share of the funds going to just 12.6 percent of scholarship recipients.

The administration of Governor Maggie Hassan has submitted brief in support of a Superior Court ruling that crippled a controversial Education tax credit program. The program gives tax breaks to businesses that donate to scholarship funds. The scholarships are then used to help students switch to a private school or homeschooling.

Last spring a judge ruled it was unconstitutional to use those funds to give scholarships to students going to religious schools. The New Hampshire Supreme Court is set to review that decision this spring.